No reason this can't be done on Linux but since NT's security model is more flexible it's a lot easier to do so on Windows. You'd need to add dedicated users. (Running a Steam daemon as root would probably cause an uproar.)
Developers who knowingly reduce or disable default Windows security settings should be censured. Because in 99% of cases it is due to ignorance or plain laziness.
It doesn't "reduce or disable default Windows security settings" in a meaningful way if you say to yourself "that folder effectively is in ProgramData, but spelled wrong".
You should never hardcode the path since it can and has moved around, though MS has implemented hard links to legacy paths because most developers are stupid and against persistent better advice do it anyway. I've seen multi-million dollar software packages whose vendor requires it to be writable by "Everyone".
Steam was first released in 2003, three years later.
For 80% of grievances about Windows, there is likely a solution in place that no one knows about because they didn't read the documentation.
And it's the same permissions either way. This isn't about permissions, it's about where they put the folder.
They didn't stop advertising Win98 support until sometime in early 2007.
Granted, Steam back then was a different creature than Steam now.
[1] https://web.archive.org/web/20020605222619/http://www.steamp...
But Windows XP, which came out in 2001, inherited everything from Windows 2000 and more, and was used extensively for gaming.
The actual solution, which remains both compatible and consistent with the security model, is that you should have to be administrator and pass UAC to install a game, just like you do to install anything else.
It's also assumed that its contents can be safely restored from original sources, so Program Files is often not backed up - because it's wasteful and not needed.
Rogue developers thinking they know better than the people who actually designed the system and ignoring the rules put in place is the source of an untold number of problems in the software world. It's absolutely stupid and I have no empathy for the problems caused as a result of their laziness. This attitude is why modern Linux is a complete clusterfuck, a free-for-all with components duct taped together every which way. Do it right or don't do it at all.
The save files don't go in the steam folder, they go into per-user Documents or AppData.